Indonesia's e-commerce regulations questioned? Nailul Huda: It may hinder economic recovery

Indonesia's Ministry of Commerce (MoT) plans to develop a series of rules to reduce the incidence of online business fraud .

“ The e-commerce discount regulations are likely to hamper the country’s economic recovery, ” Nailul Huda, a researcher at the Institute for Development of Economics and Finance (Indef), said on March 9 .

He added: “Public consumption is an important factor driving the national economy. In addition, he believes that the government’s efforts to get rid of the economic growth caused by the epidemic will hinder the progress of the country’s economic recovery .

Due to the impact of the epidemic, the public's purchasing power has declined significantly , and the government's formulation of regulations on e-commerce discounts is itself a problem.

Nailul Huda believes that e-commerce discount regulations are likely to disperse people's consumption, and consumer demand for products will tend to decline, ultimately affecting corporate production and seller sales .

In addition, he added : " The reduction in traffic on the platform may have a certain adverse impact on the platform's financing . When this happens, the domino effect will be more obvious . We should also consider whether this " discount war " will lead to an increase in imports for e-commerce platforms . "

According to Nailul Huda, the government will also need to determine whether the regulation will target other online sales channels besides e-commerce platforms and marketplaces.

It is reported that many sellers sell through social platforms and markets , such as Instagram, WhatsApp, Twitter, etc., but these platforms may not be affected by these regulations .

He believes that the government should focus more on expanding the production scale of MSMEs and improving their production efficiency. He said : "In addition, the government can give priority to the development of this industry to increase the participation of MSMEs in e-commerce competition."

Prior to this, the Ministry of Trade has formulated some rules for commercial fraud in online stores such as e-commerce platform sellers . " Price issues are issues arising from transactions between buyers and sellers, but for this kind of discount business, we will regulate it, " said Trade Minister M. Lutfi at a working meeting of the Ministry of Trade on March 4 .

E-commerce

Indonesia